Fed sees ‘more lasting,’ but ‘still temporary’ high inflation
The Federal Reserve stated on Friday in its semi-annual Monetary Policy Report that the inflation in the United States is expected to remain elevated for a longer period of time. However, the upward pressure on prices is still expected to be temporary, the central bank said.
Further, the central bank reported that the US labor market continued to recover from the coronavirus pandemic, albeit the unemployment remains elevated in June. Labor force participation has not moved up from the low rates that have prevailed for much of the past year.
Meanwhile, the gross domestic product increased 6.4% in the first quarter, propelled by a surge in household consumption and a solid increase in business investment, but restrained by a substantial drawdown in inventories as firms contended with production bottlenecks. . Data for the Q2 suggest a further robust increase in demand, the report added.
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